What does SAP’s Product Strategy mean for partners ?

SAP has gone through a huge amount of positive change over the last few years; unfortunately the same can’t be said for the global economy. The volatility we’ve experienced of late has left most of us questioning how to keep up, although many are still guilty of failing to explore opportunities outside of their comfort zone. Last week I presented at the SAP Strategic Partner Community Day in Maidenhead and it got me thinking about what’s in it for SAP Partners in 2012 and beyond. The quandary many system integrators face today is whether or not to continue focus on delivering ERP applications until the economy is in a better place. I would say yes, but not at the expense of new opportunities.

Up to about five years ago SAP was an Application company. Back then it focused on delivering best practise business software that improved efficiencies and integrated business processes. There was good money to be made in helping customers through their transformation journeys. Many system integrators focused on this area but its relevance in today’s market has become increasingly scrutinised. In my view, scrutiny or not, it continues to prove its worth.

Through all the change in SAP’s strategy there has been a remaining constant – applications. And it’s still a growing market. According to Gartner SAP has a 25.5% market share in ERP, twice that of its nearest competitor, not to mention its 13.2% growth in 2011. So it’s clear that some partners can continue doing exactly what they have been for the last few years because the business model still works.

However, much has happened in the past five years. SAP acquired Business Objects (and moved into the Analytics space), Sybase (for Mobility and also an element of the Database and Technology market) and, in the past year alone there has been big investments in acquiring SuccessFactors and Ariba, providing SAP with a huge share of the Cloud market.

Innovation has come internally too – take SAP’s in-memory technology SAP HANA which will increasingly play a part in the SAP product strategy. The opportunity for SAP HANA is not just in the database space but in the innovative applications that can be built on top of what’s considered to be game-changing technology.

So with all this going on – what does it mean for partners ?

My observations include:

Some partners are putting their heads in the sand and ignoring the innovation areas, opting for a “we do ERP” mentality

Some partners are doing great things in the innovation space – but not with SAP software. I was at one partner’s recent Client Day where they showcased their force.com based pub financials and stock management solution

Are any of these right or wrong? No, of course not. It all depends on what strategy the particular partner wants to adopt.

My point is that, as a partnership, we should work closely together to make a conscious decision on areas of focus, speciality and opportunity.